\u3000\u3000 Xinfengming Group Co.Ltd(603225) (603225)
The company expects to realize the net profit attributable to the parent company of RMB 2.150-2.35 billion in 2021 and maintain the “buy” rating. On January 20, the company issued an announcement on the pre increase of annual performance in 2021. The company expects to realize the net profit attributable to the parent company of RMB 2.150-2.35 billion in 2021, with a year-on-year increase of 256.52% to 289.69%, a record high. With the opening of “dual control of energy consumption” in 2021q4, the company’s energy and power cost pressure increased, the production and sales volume was also affected to a certain extent, and the performance of Q4 declined. In combination with the announcement, we lowered the company’s profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 2.247 (- 4.44), 3.016 (- 5.60) and 3.611 (- 490) billion yuan, corresponding to EPS of 147 (- 0.29), 1.97 (- 0.37) and 2.36 (- 0.32) yuan / share respectively, and the current share price corresponding to PE of 10.4, 7.8 and 6.5 times respectively. We are firmly optimistic about the future growth of the company and the steady profitability of filaments, and maintain the “buy” rating.
Q4 is expected to realize net profit attributable to parent company of 216-416 million yuan. Affected by the “dual control of energy consumption”, the performance fell month on month. 2021q4 company is expected to realize net profit attributable to parent company of 216-416 million yuan, down 32.0% – 64.7% month on month, and deduct net profit attributable to non parent company of 215-405 million yuan, down 27.5% – 61.5% month on month. According to wind data, the price difference of Q4 filament POY is 1625 yuan / ton, which is + 22.2% compared with Q3, and the price difference of Q4 PTA is 450 yuan / ton, which is + 6.2% compared with Q3. Although the price difference has expanded, since the “dual control of energy consumption” at the end of September 2021, the company’s operating load may be affected to some extent. At the same time, the rising cost of energy and electricity has increased the company’s operating cost, and the profitability, production and sales of products have been affected to varying degrees, resulting in the decline of the company’s Q4 performance month on month. Approaching the Spring Festival, it has entered the off-season of filament. As of January 20, the price difference of POY is 1622 yuan / ton and that of PTA is 407 yuan / ton, which puts pressure on the profitability of PTA. As of January 20, the number of days of POY inventory was 14.7 days, with seasonal accumulation before the Spring Festival after four consecutive weeks of decline. We are still optimistic about the tenacity and steady profitability of the polyester filament industry, and will further usher in the industry recovery with the improvement of the global epidemic.
The company’s capacity expansion plan is clear, and the profit center will gradually rise in the future, with full growth. According to the company’s announcement, at present, the company has 6 million tons of polyester filament and 600000 tons of polyester staple fiber. In 2022, according to the construction progress, we expect to put in 1 million tons of polyester filament and 600000 tons of polyester staple fiber. On January 4, the company held the commencement ceremony of Dushan energy phase III PTA project, marking a firm move towards the goal of “two 10 million tons”. We are firmly optimistic that the profit center of the company will gradually rise in the future, and the growth is worth looking forward to.
Risk tip: the oil price has decreased significantly; Weak downstream demand; Production capacity was lower than expected.
